Driven by Strong Growth in the China Market, Revenues and E-scooter Sales Volume increased significantly
For Q3 2020, the revenue is RMB 894.5 million, which is an increase of 36.7% YoY. The net income is RMB 80 million for Q3 2020, compared with RMB 66.4 million in Q3 2019. The adjusted net income (non-GAAP) is RMB 90.6 million, compared with RMB 72.5 million in Q3 2019.
Due to strong growth in China, the number of e-scooters sold reached 250,889 units, which is 67.9% YoY. The number of e-scooters sold in China reached 245,293, which is up 70.2% YoY. E-scooter sales revenues from China market is RMB 740.8 million, an increase of 39.2% YoY, which represents 92.6% of total e-scooter revenues. The increase is mainly driven by retail network expansion and new product launches in China. During Q3 2020, the number of franchised stores in China reached 1,266, which is an increase of 182 stores from Q2 2020. In the international market, the number of e-scooters sold reached 5,596 units, which is up 6.3% YoY. Due to the higher average sales price in the international markets, e-scooter sales revenues from international markets is RMB 59.6 million, represented an increase of 35.2% YoY. The international sales network now expanded to 36 distributors covering 46 countries.
Accessories, spare part sales and services reached a revenue of RMB 94.1 million, an increase of 20.2% YoY and represented 10.5% of the total revenue. This increase is mainly due to higher sales from China market. Gross margin declined from 22.2% to 20.9% in Q3 2020 compared with Q3 2019, which is mainly due to sales discount and high sales volume of G0 model that has a lower gross margin.
Additional Expansion of Product Portfolio and International Sales Network
NIU continued its focus on new products development in Q3 2020. R&D expenses is RMB 28.9 million (including RMB 3.0 million of share-based compensation) in Q3 2020, which is an increase of 69.4% from RMB 17.1 million in Q3 2019.
Meanwhile, NIU also has been expanding into new international markets and will continue to advance its global strategy. NIU CEO Dr. Yan Li commented: “Southeast Asia will become an important market for NIU in Q4 2020. In Q4 2020, we plan to launch our new Gova product in Indonesia market. The marketing campaign and pre-sales will start from December 2020.”
In October 2020, the number of e-scooters sold in the international markets reached 2,275, which represents an 83.9% YoY growth. In November 2020, sales volume for the first 19 days has surpassed the total sales volume for the entire month of November 2019. NIU expects revenues of the Q4 2020 to be in the range of RMB 565 million to RMB 615 million, which represents YoY increase from 5% to 15%.
Dr. Yan Li commented: “We are very pleased to see the strong sales growth in China during Q3 2020. Although our international sales were affected by rebound of COVID-19 in Q3 2020, we are working closely with our international distributors to mitigate the impact to bring our sales back to fast growth. With the continued cost optimization efforts, we expect our gross margin to improve. For the Indonesia market, we are very excited about the growth prospective and plan to expand our product portfolio and retail sales network in the next few years.”
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